What is FirstBuy?
FirstBuy is a new government scheme offering financial assistance for first-time buyers.
Those who qualify will be able to apply for a loan-to-value mortgage for 75% of the property’s worth, with only a 5% deposit.
The remaining 20% of the value will be offered as an “equity loan”, which the buyer must pay back either when the home is sold (or after 25 years).
Is FirstBuy good value?
Firstly, remember that this “equity loan” is not a grant, and must be paid back.
The loan will be interest-free for the first five years, with interest charged at 1. 75% in year six, and at RPI inflation plus 1% thereafter.
Fundamentally, because the loan must be paid back when you sell, and will stay at 20% of the value of the home, buyers are signing away that 20% share of the profit of their house sale.
First-time buyers must ask themselves if getting a foot on the property ladder is worth this 20% “hit” in their future profit.
Am I eligible for FirstBuy?
For those with less than £60, 000 a year household income and a 5% deposit, FirstBuy will be available from September 2011.
The scheme is only intended to be available for new builds in specified developments.
Details regarding eligibility are still incoming, so watch this space. . .
FirstBuy isn’t right for me. What can I do?
If you need to move sooner, or are not a first-time buyer, then the good news is that you have plenty of options.
If you are already selling a property and have found a buyer, remember that quality conveyancing is essential to a smooth exchange.
For further information, and a guaranteed competition-beating quote, try the Fridaysmove Conveyancing Cost Calculator today.
When can I apply for FirstBuy?
FirstBuy is due to launch this September, but there is expected to be a great deal of interest in the scheme.
Buyers who are interested should prepare themselves beforehand by doing as much research as possible. Fridaysmove FAQs are a rich source of information and advice.
What do I need to apply?
Buyers must put up a 5% deposit for the value of the property.
Further specifics will be announced in due course through the press, and by the Homes and Communities Agency.
Will FirstBuy be available in Wales?
Yes. The FirstBuy scheme will be available for eligible first time buyers in Wales.
£250 million has been made available nationwide, over the next two years, with £40m ring fenced for Wales, along with Scotland and Northern Ireland.
Newport-based solicitors Harding Evans work with Fridaysmove to get the best conveyancing quotations for buyers across Wales, and the UK.
Isn’t this the same as HomeBuy?
FirstBuy is similar to the HomeBuy scheme launched by the previous Labour government in September 2008. HomeBuy offered a 30% equity loan, and though the funding has finished a small number of first-time buyers may still be eligible.
For more information, visit the Homes and Communities Agency website.
Where can I get more information?
FirstBuy will be a hot topic when it goes live later in the year, so keep an eye on the newspapers’ property supplements.
The Homes and Communities Agency will likely operate the scheme in England, and will also have more information on the scheme as it becomes available.